Jonathan Loynes Growth Quotations

Italy is going to remain at the back of the performance tables. We should see a pick-up in growth this year, but it is coming off a very low base. It is a cyclical recovery rather than any kind of real structural improvement.

January's UK retail sales figures confirm the evidence from the surveys that the pick-up in spending growth over Christmas was short-lived.

While the stronger-than-expected rise in British GDP put a further dent in the prospects of an interest rate cut in February, we still expect the combination of sluggish growth and falling inflation this year to prompt a modest loosening of monetary policy.

To hit Mr Brown's forecast now, quarterly growth would have to average around 1.0 percent in the remaining three quarters which looks very unlikely.

It would have been better to have left the growth forecast unchanged, but that would have lowered the inflation forecast to below its target. They are having to work hard not to have to cut interest rates.

The ECB may feel that the time is right to conclude that the risks to growth are now more equally balanced. Without a corresponding softening of the perceived upside risk to inflation, this would be seen as a strong signal that it is preparing to lift rates further.